We propose to evaluate the role of comorbid depression as a moderator of the clinical effectiveness and costs of Medicare's new Voluntary Chronic Care Improvement Program (CCIP), and to assess the value added of managing comorbid depression in this program. The Medicare Modernization Act of 2003 created the CCIP to manage care for Medicare beneficiaries with significant chronic illness. In its initial phase, the CCIP will implement three-year pilot programs in ten sites, targeting Medicare beneficiaries with congestive heart failure, complex diabetes, and/or chronic obstructive pulmonary disease. The pilot programs will be implemented as randomized control trials and will cover 15,000-30,000 beneficiaries per site. At the time of this writing, CMS is selecting organizations to provide CCIP services; patient enrollment begins in 2005. The CCIP is the first large-scale disease management initiative under the Medicare FFS program. It is also the largest-ever disease management trial for patients with comorbid depression, which is particularly prevalent (15%-25%) in the CCIP's target population. Chronically ill patients with comorbid depression have more severe medical illness, worse clinical outcomes, and higher health care costs than those without - which make them important potential targets for disease management. At the same time, patients with comorbid depression are harder to treat with conventional disease management programs that don't address depression, due to lower adherence to self-care (e.g., diet, exercise, smoking cessation) and medical regimens. This is likely to raise the costs and/or lower the benefits of disease management interventions for such patients, relative to patients with the same medical conditions but without comorbid depression. These patterns suggest that there may be considerable clinical and economic benefits from including specific strategies to address comorbid depression in disease management programs for chronic medical illness. We propose to investigate this by working with CMS to facilitate the integration of evidence-based depression management in the CCIP, and by analyzing patient- and organization-level data from the initial phase of the CCIP. Our findings will help CMS strengthen the CCIP and will help public and private policymakers implement effective disease management programs for chronic medical illness and comorbid depression.